EEO-1 Update: EEOC Pursues Info Without Pay Data

EEO-1 Update: EEOC Pursues Info Without Pay Data

One week before the typical EEO-1 filing deadline of March 31st, EEOC published a notice of information collection in the Federal Register for a 30-day comment period. As with the initial 60-Day Notice, published in September 2019, EEOC continues to seek a three-year approval for the standard EEO-1 data collection (for years 2019, 2020, 2021), but with a new Paperwork Reduction Act (PRA) control number. In the 30-Day Notice, EEOC reiterates its intention to not seek approval of the Component 2 summary pay data collection. As summarized in both the 60-Day and 30-Day Notices, EEOC determined that the uncertain utility of the Component 2 data was outweighed by the burden placed on employers to collect the data.

EEOC received 11,504 (timely) comments in response to the 60-Day Notice. Almost all public comments supported the EEOC’s proposal to continue to collect Component 1 data. Reportedly, a small number of comments recommended changes for Component 1. Notably, two of these commenters suggested that EEOC consider including non-binary gender as an option for reporting. While most commenters emphasized the importance of addressing pay inequity, the feedback on the discontinuation of Component 2 were more divergent. Below is a high-level overview of feedback following the 60-Day Notice.

EEOC Background

Before submitting the 60-Day notice, EEOC’s Office of Enterprise Data and Analytics (OEDA) revisited the methodology used in 2016 for calculating EEO-1 burden estimates. OEDA staff concluded that the EEOC’s 2016 calculation had underestimated the burden as it did not account for the burden of filing each type of the EEO-1 report. Specifically, the 2016 calculation only focused on overall company reports (i.e., Type 1 and 2 reports), which was the standard approach taken by the Office of Management and Budget (OMB) and the Government Accountability Office (GAO). The methodology described in the 30-Day Notice account for the burden of filing each different type of report, including establishment reports (i.e., Type 3, 4, 6, and 8 reports).

Support for Removal of Component 2

Many comments which supported the removal of Component 2 data collection believed the burden estimate in the 60-Day Notice still to be too low given company experiences in filing the 2017 and 2018 pay data. Respondents noted several difficulties, many of which would not be “overcome” by automation in future filings if the filing was to be recurring. This includes difficulty matching W-2, Box 1 information to demographic data, employee status changes during the reporting year, and business changes (i.e., mergers and acquisitions). Addressing these issues required manual review and adjustment prior to filing.

Many of the commenters also believe that the Component 2 summary pay data would be ineffective in addressing pay equity issues; sighting that the W-2, Box 1 data and hours worked were inaccurate and inappropriate measurements. W-2, Box 1 wages did not reflect all pay earned, while including pay for hours not worked (e.g., vacation, holiday, etc.), did not correspond with the hours-worked data. Commenters also argued that the EEO-1 job categories and pay bands were too broad, resulting in inaccurate and misleading comparisons.

Issues regarding the lack of pilot study prior to this data collection were included.

Support for Keeping Component 2

Comments in support of the Component 2 data collection articulated that it was a necessary and effective tool to identify and address pay gaps. Many believed the aggregated data would identify pay trends and expose issues such as job segregation.

Many commenters saw the data collection as an essential tool and felt the removal of Component 2 data collection would undermine the EEOC’s ability to combat pay discrimination.

The majority of commenters noted that the removal of the pay data collection was premature and criticized EEOC for not analyzing the collected 2017 and 2018 data in determining the utility.

Many comments in support of Component 2 data collection believed the requirement would incentivize employers to voluntarily comply with equal pay laws. Further, they believe the Component 2 data would provide useful data for employer self-assessments.

In addition to the comments received from the 60-Day Notice, EEOC also held a public hearing in November 2019. As noted above, EEOC ultimately determined “it cannot state that Component 2 data has significant practical utility in assisting the Commission in fulfilling its mission in combating illegal employment discrimination”. If EEOC pursues a pay data collection in the future, it will utilize the notice and comment rulemaking process, as opposed to an information collection request process. EEOC believes there should be a “transparent and open process” that utilizes recommendations provided in the 2012 National Academy of Sciences (NAS) study, including a scientifically sound pilot study to test the collection instrument and planned use of data.

The 2019 EEO-1 filing period cannot begin until EEOC receives final approval from OMB. In accordance with the PRA, after the 30-day comment period, OMB will review the final notice and form; OMB will either approve, reject, or return the form for modification. DCI anticipates EEOC’s proposed data collection, with a new control number and without pay data, will be approved by OMB; however, it is not guaranteed. We recommend employers continue to prepare their 2019 EEO-1 data based on prior filing requirements, so that they are prepared when the filing website does open. As communicated by EEOC to employers via direct email (February 28, 2020), and stated on the EEO-1 and EEOC webpages, EEOC will send a notification directly to employers when the opening of the collection, and new deadline date, is known. Comments for the 30-Day Notice are due no later than April 22, 2020. Given this timeline, we are likely several months, at least, from a filing deadline for the 2019 EEO-1 reports.

Amanda Bowman is an Associate Principal Consultant at DCI Consulting Group. Amanda provides clients with guidance on EEO and affirmative action statutes and regulations to meet OFCCP compliance requirements. If you’d like more information, contact DCI Consulting Group at (202) 828-6900 or visit their website.